Nearly three months ago, COVID-19 began shutting down a whole lot of non-essential businesses, like movie theaters. By March 17th, America’s largest movie theater chain, AMC, had temporarily closed all of its 630 locations, and they planned to stay closed for at least 12 weeks.
Despite the fact that two movie theater chains in Texas re-opened several locations at limited capacity last month (because some people really are too proud to steal a Netflix password), AMC didn’t want to take any chances. Next week will officially mark 12 weeks of every AMC in the country being closed. Coronavirus continues to be a problem, and AMC definitely won’t be opening up next week. But now they’re saying there’s a good chance they won’t open up, ever.
AMC is scheduled to have an earnings call next week, which means the higher-ups at AMC get on a call with investors, shareholders, and members of the media, and give them a report on a certain fiscal period, like the business year, or a business quarter. AMC obviously doesn’t want to have that call. Because AMC just released an 8-K form, which is a form they have to file with the Securities and Exchange Commission if they’re about to announce a major event that she shareholders should know about. AMC was already carrying a debt load of $5 billion by the end of 2019. And guess what doesn’t fix a debt problem? Going three months with $0 in the cash register and not a single ass in a seat. via The Verge:
Over the last few months, AMC Theaters has effectively generated no revenue, as government-imposed restrictions and theatrical delays have stopped the company’s primary revenue generator: movie tickets and concessions. AMC Theaters, alongside competitors, is hopeful that theaters can begin to reopen en masse in July.
If AMC Theaters isn’t able to begin operations by then, “substantial doubt exists about our ability to continue as a going concern for a reasonable period of time.” The filing adds that because AMC has never “previously experienced a complete cessation of our operations,” the company is unable to make any predictions because everything is up in the air and changing all the time.
So because they’ve never shut down for three months, they have no idea how they might recover from that. Especially since no one really knows how social distancing will work in a post-corona world. Well, for one thing, I’m pretty sure the ol’ popcorn trick is a thing of the past.
Another thing The Verge points out is that there has been a successful pivot to premium streaming services, which AMC really hasn’t gotten a hold on. AMC also isn’t making many friends in the digital streaming world. After NBCUniversal decided to release Trolls World Tour on streaming services, and thus skipping the traditional theatrical release, AMC CEO Adam Aron issued a letter to NBCUniversal, informing them that AMC would never again play a Universal film.
AMC is preparing for the worst, but I think they’ve got to think positive and start getting creative. Will we ever go back to a movie theater and sit for two hours in an uncomfortable seat that might have bed bugs while the soles of our shoes become permanently affixed to a dried-up Pepsi spill on the floor? I can’t say. But I do know that there’s one aspect of the theater experience that I will miss so much if it closes. And that’s movie theater nachos! AMC should convert their operations to a mobile snack delivery subscription service. For $79.99 a month, AMC will deliver a giant bag of stale corn chips and a 10L tub of that questionable cheez straight to your door. Hey, it’s still cheaper than going to see a movie at an AMC.